Introductory Video

Common Questions on Bankruptcy

What is a Debtor?

In its most basic form, a debtor is a person who owes someone else money. A creditor is the person who is owed money. For example, If John loans Mary fifty dollars, then John is the creditor of Mary, and Mary is the debtor of John.

What is Bankruptcy?

Bankruptcy is the legal method for a debtor to “discharge” or relieve himself of the debts that he owes. While no debtor is guaranteed a total discharge of his debt, most debtors who file for bankruptcy are given such relief. One of the primary purposes of the bankruptcy act is to relieve the honest debtor from the weight of oppressive indebtedness and to provide the debtor with a fresh start.

Who can file for bankruptcy?

Any person can file for bankruptcy protection from creditors. In addition, most businesses and charitable organizations may also qualify for bankruptcy protection.

What happens to my bills after I file for bankruptcy?

As soon as your case is officially filed with the court, creditors are legally prevented from attempting to collect on any debt owed to them by you. This means that creditors must stop all collection activity, including: telephone calls, harassing letters, repossessions, foreclosures, lawsuits, and wage garnishments. Once the case is concluded, the court may enter a “discharge”. A discharge is a total release of a debtor from any further personal liability for his or her pre-bankruptcy debts.

What is the difference between Chapter 7, 11, and 13 bankruptcy?

In a typical Chapter 7 bankruptcy (also known as liquidation), a trustee collects the nonexempt property of the debtor, converts the property to cash, and distributes the cash to the creditors. In contrast, Chapters 11, 12, and 13 of the Bankruptcy Code contemplate debtor rehabilitation. In a rehabilitation case, creditors look to future earnings of the debtor, not to the current property of the debtor. Under rehabilitation, a debtor will generally retain his assets and property, while making payments to creditors pursuant to a court approved plan.

Will filing bankruptcy affect my credit rating?

Not as much as you think it will. While Federal Law permits credit reports to show a bankruptcy for up to ten years after a filing, most individuals are able to rebuild their credit much sooner than that. Most of our former Chapter 7 clients are able to obtain new unsecured credit within a few months after their discharge and many report being able to obtain secured credit, albeit at a higher interest rate. If you are currently contemplating bankruptcy, then it is likely that your current credit rating has already been effected. A discharge of your current debt may provide the opportunity to rebuild your credit with steady, regular payments on a new account.

How long will a bankruptcy show on my credit reports?

The Fair Credit Reporting Act prohibits the reporting of outdated information about consumers. With a few exceptions, credit-reporting agencies can only disclose a bankruptcy during the first ten years following a filing.

Will I lose my house, car, and other personal property?

Section 522 of the Bankruptcy Code provides very liberal “exemptions” so no assets are lost to creditors in most cases. The Code affords debtors a “Fresh Start” free of debt and creditor calls, and with assets and the right to earn and save money in the future as if no bankruptcy were filed. The exemptions are as follows:

$22,975 in value in real property per person ($45,950 for married couple filing joint petition);

Wildcard-exemption of $1,225 per person plus up to $12,725 of any unused amount of the homestead exemption;

$3,675 in value in one motor vehicle;

$12,250 in aggregate value (doubled for married couple filing jointly) in household goods and furnishings.

When you meet with Mr. Detzky he will fully explain which “Exemptions” will apply in your particular case and all the real and personal property you will keep if you decide to file a bankruptcy case.

Should I file for bankruptcy?

The decision to file bankruptcy should only be made after you have consulted with an experienced bankruptcy attorney and thoroughly discussed all of your available options. The Law Offices of Michael L. Detzky offer a free and confidential office consultation to individuals contemplating bankruptcy. Call us today at (732) 780-3090 to arrange for your appointment. Mr. Detzky will discuss other ways you can start to rebuild your credit after bankruptcy.

* Michael L. Detzky, Esq. – Over 35 years New Jersey Bankruptcy Experience – 732.780.3090 *

Is There Life After Bankruptcy? What You Can Expect

The most immediate effect you will experience upon filing bankruptcy is relief! Your creditors MUST stop harassing you. Your phone stops ringing, you’re no longer afraid to pick up the mail, or of being sued. You can devote your income to keeping up your living expenses and trying to get your financial life back on track.

Naturally, when you’ve just filed bankruptcy, your credit won’t be strong. Of course, your credit probably wasn’t strong when you were dealing with the crises that forced you to file bankruptcy, so that’s nothing new, but bankruptcy can offer you a “Fresh Start”, a way to get out from under and start on the road back.

Stepping back into the world of finances without the burden of insurmountable debt is a great feeling, some say it’s a gift. The most important thing to do is to keep yourself on the right track; make the right decisions, be credit smart. As part of the bankruptcy process you will receive a brief presentation by a trained credit counselor who will give you suggestions and tips on how to avoid ever falling back into financial distress again.

Contact New Jersey Bankruptcy Lawyers, Detzky, Hunter & DeFillippo Now

Mr. Detzky has been engaged in consumer and business bankruptcy in New Jersey for more than 35 years. He served as a Chapter 7 Bankruptcy Trustee in the United States Bankruptcy Court for the District of New Jersey for over 15 years. His dual experience as both a seasoned bankruptcy practitioner and former bankruptcy trustee affords him the unique perspective of evaluating your case from both sides and minimizes the potential for any unexpected problems with your case.

Whether you are an individual who has become overwhelmed with personal debt or a business owner unable to cope with the financial challenges imposed by the recession, filing for bankruptcy may be something you should consider. However, this is a major decision involving a highly complex legal process that nearly always requires the guidance of a seasoned bankruptcy attorney to achieve the most successful outcome. Mr. Detzky has the experience and knowledge to conduct a comprehensive evaluation of your financial circumstances and will fully explain the intricacies of the bankruptcy process and how it may help you so that you can make an informed decision.

While bankruptcy laws are designed to create financial order out of chaos, there are significant issues to take into consideration prior to filing. Mr. Detzky will explain these complex concepts to you in a straight forward and simplified manner that will help to alleviate your stress and provide you with a definitive plan of action on how to achieve a “Fresh Start.”

* Michael L. Detzky, Esq. – Over 35 years New Jersey Bankruptcy Experience – 732.780.3090 *